The nature of employment mainly determines the PRSI contribution class that applies to the employee.

PRSI Class A applies to the majority of employees in the private sector and to employees recruited in the public sector since 6 April 1995.

Note

Since April 1991 the level of earnings, not the number of hours worked, determines insurability.

You can get full details of the main contribution classes and examples of both the employees covered by each class and the rate of contribution appropriate to each class from the
SW 14 booklet.

Contribution Class A applies to people in industrial, commercial and service-type employment under a contract of service and civil and public servants recruited since 6 April 1995, whose combined reckonable earnings from all employments bring them into Class A.

The appropriate subclass within Class A is based on the earnings in each separate employment (see codes within PRSI classes in
paragraph 27).

Contribution Class J applies to the following groups of people:

employees in industrial, commercial and service-type employment under a contract of service, whose combined weekly reckonable earnings from
all employments are below the threshold for Class A (less than €38 per week in the 2005 tax year. Please check
SW 14 for the current amount),

employees over 66 years of age,

employees who are also full-time civil and public sector employees and paying PRSI Class B, C, D or H in their full-time job.

Contribution Classes B, C and D apply to pensionable employees in the civil and public service, including civil servants, teachers, gardaí, the army and local authority employees who were recruited before 6 April 1995.

Contribution Class H applies to NCOs and enlisted personnel of the defence forces.

Contribution Class K applies to people under 70 years of age who are not insurably employed under the Social Welfare Acts. The following are examples:

people getting a pension from a former occupation,

people normally paying Class S who have reached 66 years of age,

people receiving income from positions of certain office holders, e.g. Judiciary, State Solicitors,

prescribed relatives.

However, if the
weekly income is below the threshold for Class K (€400 in 2005 tax year)
contribution Class M applies. Please see
SW 14 booklet for current thresholds.

You should also use
contribution Class M for people who:

are under 16 years of age;

are normally insurable at Class K who: - hold a medical card or - get a Social Welfare Widow's/Widower's Pension - get a One-Parent Family Payment - get Deserted Wife's Benefit/Allowance - are aged 70 years or over - get a widow's or widower's pension under the social security legislation of another country covered by E.C. Regulations.

Contribution Class S applies to self-employed contributors who pay tax and PRSI under the self-assessment system (Schedule D). For enquiries contact the Self-Employment Section (see address in
paragraph 70).

Directors whose income is assessable under Schedule E tax may also be liable to pay Class S.

Directors

Depending on the circumstances, Directors can either be employees paying PRSI at Class A insurance or self-employed under a contract for services and therefore paying PRSI at Class S. The Department's website has a comprehensive checklist to determine Employment or Self-employment status of individuals. The links to these booklets are

Hard copies of these booklets are also available from Scope Section. If you are still unsure and require clarification on the Class of PRSI for specific directors you should contact Scope Section (address in
paragraph 70).

If you are a company director and you are correctly paying Class S PRSI you should contact
Directors Unit, Waterford for queries regarding your PRSI rates and entitlements. See
paragraph 70 for contact address and phone numbers.

Agency Workers

Persons employed by Employment Agencies under a contract of service are insurable at PRSI Class A. The person or company who is liable to pay the wages or salary of the individual concerned in respect of work or service is deemed to be the individual's employer.

If a person, recruited by an Employment Agency and acting as a sole-trader, performs any work or service for a third party then that person is insured at PRSI Class S provided the annual income exceeds €3,174 for year 2005 (see
SW 14 for current rate).

Excepted Employments

There are employments that are specifically excluded from cover under Social Welfare regulations. These employments are listed in Part II of the first Schedule of the Social Welfare Acts. A common excepted employment would be that of a spouse working for a sole-trading spouse, no PRSI is payable and Class M should be returned where the income is less than the Health Levy threshold and Class K when the Health Levy is payable.

You must by law keep records relating to all employees for whom PRSI contributions must be paid. Record the following details (where applicable) at or before the time you pay wages:

the amount of each payment of earnings made to each employee during the year,

the PRSI contribution paid by the employee for each such payment and the total (employer's and employee's) contribution which you must pay over to the Collector- General,

start and end dates of employment within any income tax year,

the contribution class that applies to each employee at the start of each contribution year (or when the employment began),

the number of weeks of insurable employment for each employee in any income tax year, and

if a change of contribution class occurred during the year, the new contribution class or subclass and the number of weeks of insurable employment at each of the different rates.

You must keep these records for a period of
six years after the end of the income tax year to which they refer and you must, on request, make them available for inspection by authorised officers of Revenue or the Department of Social and Family Affairs.